Largest wireless merger in history inspected for potential anti-competitive impact

March 29, 2011

Largest wireless merger in history inspected for potential anti-competitive impact

The office of Attorney General Eric Schneiderman will undertake a thorough review of AT&T's acquisition of T-Mobile. The proposed merger would create the nation's largest wireless company with a total of 130 million subscribers nationwide, opening the door to a near duopoly shared by the merged firm and Verizon. The Attorney General will analyze the merger for potential anti-competitive impacts on consumers and businesses across New York State, he announced yesterday.

Several attendees at CTIA Wireless in Orlando, Florida last week commented on the fact that the proposed merger[2] will face a future of regulatory battles such as this review before it can be accepted.

T-Mobile, a subsidiary of Deutsche Telekom, is a low-cost provider of choice for millions of New Yorkers and currently has 34 million customers nationwide, making it the fourth-largest wireless company in the country. The proposed merger could start a process of consolidation that would lead to two firms – AT&T and Verizon – controlling nearly 80% of wireless subscribers nationwide and dominating the U.S. wireless business.

"Cell phones are no longer a luxury for a few among us, but a basic necessity. The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise," said Attorney General Schneiderman. "Affordable wireless service and technology, including smart phones and next generation handheld devices, are the bridge to the digital broadband future. We want to ensure all New Yorkers benefit from these important innovations that improve lives."

Attorney General Schneiderman stressed that some market conditions may differ across the state and highlighted the potential impact of the merger in areas like Rochester, Albany, Buffalo and Syracuse, where there are already fewer wireless options. He is also concerned about the impact on consumers throughout the state, where T-Mobile is a low-cost option. In announcing his review, Schneiderman noted that the impact of the merger is likely to be felt statewide, and that the review will therefore examine all aspects of the likely impact of the merger on consumers and businesses in all affected areas throughout New York.

Attorney General Schneiderman stressed that he will closely scrutinize AT&T's argument that the merger has the potential to produce some benefits, such as expanding the coverage of AT&T's next generation broadband wireless network to rural areas in upstate New York that are underserved and have poor wired broadband connectivity. Supporters argue that the merger might improve broadband service for T-Mobile customers by fulfilling some of their spectrum needs through access to AT&T's advanced network. The Attorney General's review will weigh the benefits to New Yorkers against the anti-competitive risks posed to them.